SEC orders Keurig Dr Pepper to pay $1.5m in greenwashing clampdown
K-Cup coffee pods have become the focus of what is one of the most high profile cases of greenwashing enforcement to be carried out to date in the US, where – this past month – the Securities and Exchange Commission has settled a case over misleading claims about the recyclability of the product.
Keurig Dr Pepper Inc, the name behind the popular K-Cup coffee pod brand has been ordered to pay a civil penalty of $1.5 million, alongside its acceptance to ‘cease and desist’ committing any further violations against the SEC’s rule over greenwashing and misleading consumer claims.
Background information
In its fiscal year 2019 and 2020 annual reports, Keurig Dr Pepper had claimed that after testing with recycling facilities, its K-Cup coffee pods could be ‘effectively recycled’. It had failed to disclose, however, that two of the largest recycling companies in the US had in fact “expressed significant concerns” to the company at the time about the commercial feasibility of curbside recycling.
While the recyclers have been unnamed by the SEC, the official documentation states they collectively operate more than one-third of US recycling facilities, and they operate what KDP characterised as high-tech equipment “that is able to sort items well.”
However, it’s according to the SEC finding that both recyclers had at the time indicated to Keurig that they did not intend to accept the pods for recycling.
The Securities and Exchange Commission also noted that recyclability claims made by the company followed a period of research conducted by a Keurig subsidiary that found consumers considered environmental concerns – such as recyclability of product and packaging – as a significant factor when deciding whether to purchase a Keurig brewing system.
Expert voices
John Dugan, Associate Regional Director, Enforcement Division, of the SEC Boston Regional Office, said: “Public companies must ensure that the reports they file with the SEC are complete and accurate,” said John Dugan, associate regional director, enforcement division of the SEC Boston Regional Office.
“When a company speaks to an issue in its annual report, they are required to provide information necessary for investors to get the full picture on that issue so that investors can make educated investment decisions.”
Finding solutions
Keurig announced in 2020 that it had achieved making 100% of its K-Cup pods recyclable, after converting more than 100 manufacturing lines to produce new recyclable format pods made from polypropylene #5 plastic.
Earlier this year, KDP announced it would introduce single-serve coffee pods that are made from plant-based materials, that potentially could be compostable, as an additional offering to its existing PP pods. And in June, the company released its corporate responsibility report that upheld its commitment to 2025 sustainable packaging goals such as making all packaging recyclable or compostable.
A spokesperson for KDP said the company remains “committed to a better, more standardised US recycling system for all packaging materials through KDP actions, collaboration, and smart policy solutions.”
Source: https://www.productsofchange.com/sec-orders-keurig-dr-pepper-to-pay-1-5m-in-greenwashing-clampdown/